Mithel said:
I would advise only playing on Normal. The entire economy is designed for normal and would be totally messed up by using a different difficulty setting.
"Balancing" is a difficult issue. To "balance" it we'd need to define which countries will be human played. No matter how much we tune and improve HoI the AI will still be a far weaker opponent than a decent human player.
If I were to do that I'd probably start with the assumption / rule that Germany and UK must be human played.
I'll definitely look into the UK manpower issue. I do believe they are building far too many units.
"Winning" is different depending on your definition. I totally ignore "victory points". For me a German win is to hold France and western Russia to the "end".
With my German naval strategy game I had 25 subs in 1941 (keep in mind I probably lost at least a half dozen between 1939 and then). So it sounds like Germany in your game may not have made all that strong of a u-boat war attempt.
Wow... the UK was supplying Russia with 200 supplies per day? That's some very friendly Brits!
- Mithel
I agree that balancing is tough ... yeah I had a feeling that you would be doing it around a Germany vs UK setup. Keep in mind though, that historically the Brits could never had attempted D-DAY alone. Here they can do it easily. Personally, I consider Germany vs Russia to be what WW2 was all about. Then I see the UK coming in as third, then Italy. If USA jumps in, its Japan instead of Italy as fifth. Sixth player would then be Italy.
Normal level ... hmm, dunno if that's good for the Axis

Mithel, what this means is that the starting IC penalties have no effect on the Allies, they can still research what they want.
I don't quite see how the war could last till the end of the game? I have been playing many MP games for over a year and I have never ever gone into 1942 even?
The Germans should have a chance to achieve victory up till 1942, mid 1942 - mid 1943 chances should be more or less equal, after mid 1943 it should be victory for the Allies.
UK was supplying Russia only during Barbarossa which lasted one whole month
EDIT: Still, in your mod Mithel these supplies I guess make a huge difference.
EDIT2: I agree with your definition of victory more or less. Still, it seems impossible to achieve in the current setup against experienced players at normal level.